MACD Based Price Forecasting
By LuxAlgoFeb 22, 2024
MACD Based Price Forecasting pushes the classic MACD beyond the present: whenever a signal condition occurs, it looks up how price historically traveled in the bars that followed comparable signals and projects that experience forward as a forecast path inside a shaded range. The approach is analog forecasting in spirit: percentiles of past post-signal trajectories rather than an extrapolated line.
How to Trade the MACD Based Price Forecasting?
- Trend Determination = MACD: a positive MACD reads as an uptrend, negative as a downtrend, and forecasts are built for that regime.
- Trend Determination = MACD-Signal: direction comes instead from the MACD's position above or below its signal line.
- Central path bias: an Average Percentile above 50 tilts the projection bullish; below 50, bearish. Align it with your outlook.
- Forecast area edges: the shaded range's bounds double as potential support and resistance zones for targets and invalidation.
- Reversal watch: with a well-chosen horizon, reversals become easier to recognize inside MACD-defined trends.
MACD Based Price Forecasting Settings
- Fast Length / Slow Length / Signal Length: the periods behind the MACD and its signal line.
- Trend Determination: selects how trend direction is inferred from the MACD.
- Maximum Memory: caps how many post-signal prices are recorded; lower values make forecasts more variable.
- Forecasting Length: how many bars ahead the projection extends.
- Top Percentile / Average Percentile / Lower Percentile: set the upper bound, central path, and lower bound of the forecasting area.
Frequently Asked Questions
Free on Vela
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- Up to 500 strategy alerts, with webhook automation
- Up to 10× the chart history of Free
- Orderflow lookback up to full history
- Up to 100,000 monthly credits for Quant to customize it
- Futures data alongside crypto, stocks, forex and commodities
Also works on
TradingView
NinjaTrader
Original indicatorBuilt in-house by LuxAlgo
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